Investment Services Act (Alternative Investment Fund Manager)

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 19,044, 8 ta’ Marzu, 2013

L.N. 114 of 2013

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Services Act (Alternative Investment Fund Manager)

(Passport) Regulations, 2013

IN exercise of the powers conferred by article 12 of the

Investment Services Act, the Minister for Finance, the Economy and

Investment, acting on the advice of the Malta Financial Services

Authority, has made the following regulations:-

PRELIMINARY

(1) The title of these regulations is the Investment Citation,

Services Act (Alternative Investment Fund Manager) (Passport) commencement

and scope.

Regulations, 2013.

(2) These regulations shall come into force on 22nd July 2013.

(3) These regulations shall apply to Maltese Alternative

Investment Fund Managers providing services in a Member State or

EEA State, other than Malta, through the establishment of a branch or

under the freedom to provide services, and to European Alternative

Investment Fund Managers providing services in Malta through the

establishment of a branch or under the freedom to provide services.

(4) These regulations transpose and implement, in part, the

provisions of Article 4(1)(a), (b), (c), (h), (j)(i) and (ii), (k), (l), (p),

(q) and (r)(i) and (ii), (w), (x), Article 33(1) to (6), Article 45(1) to (8)

and Article 61(2) of the AIFM Directive, and they shall be interpreted

and applied accordingly.

(1)

In these regulations, unless the context otherwise Interpretation.

requires

"the Act" means the Investment Services Act;

"the AIFM Directive" means Directive 2011/61/EU of the

European Parliament and of the Council of 8 June 2011 on

Alternative Investment Fund Managers and amending Directives

2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009

and (EU) No 1095/2010 as amended from time to time, and includes

any implementing measures that may be issued thereunder;

"Alternative Investment Fund" or "AIF" means a collective

investment scheme, including subfunds thereof, which raises capital

from a number of investors, with a view to investing it in accordance

with a defined investment policy for the benefit of those investors,

and which does not qualify as a UCITS Scheme in terms of the

UCITS Directive;

"Alternative Investment Fund Manager" or "AIFM" means a

legal person whose regular business is managing one or more AIFs;

"branch", when relating to an AIFM, means a place of business

which is a part of an AIFM, which has no legal personality and which

provides the services for which the AIFM has been authorised; all the

places of business established in the same Member State or EEA State

by an AIFM with its registered office in another Member State or

EEA State or in a third country shall be regarded as a single branch;

"competent authority" means the Malta Financial Services

Authority established by the Malta Financial Services Authority Act,

which body shall also carry out the duties as competent authority for

all purposes of the AIFM Directive;

"ESMA" means the European Securities and Markets Authority

established by Regulation (EU) No. 1095/2010 of the European

Parliament and of the Council of the 24 November 2010;

"established" means

(a)

in relation to an AIF, the place where the AIF is

authorised or registered or if the AIF is not authorised or

registered, the place where the AIF has its registered office;

(b) in relation to an AIFM, the place where the AIFM

has its registered office.

"European AIF" means

(a)

an AIF which is authorised or registered in a

Member State or EEA State, other than Malta, under the

applicable national law; or

(b) an AIF which is not authorised or registered in a

Member State or EEA State but has its registered office and, or

head office in a Member State or EEA State other than Malta;

"European AIFM" means an AIFM which has its registered

office in a European Member State or EEA State, other than Malta;

"European AIFM home Member State or EEA State" means the

Member State or EEA State, other than Malta, in which the European

AIFM has its registered office;

"European AIFM host Member State or EEA State" means

(a)

a Member State or EEA State, other than the home

Member State or EEA State, in which a European AIFM

manages European AIFs; or

(b) a Member State or EEA State, other than the home

Member State or EEA State, in which a European AIFM

markets units or shares of a European AIF;

"European regulatory authority" means the body or bodies

designated by a Member State or an EEA State other than Malta in

accordance with Article 44 of the AIFMD to carry out the duties

provided for in the AIFM Directive;

"home Member State of the AIF" means

(a)

the Member State or EEA State in which the AIF is

authorised or registered under applicable national law, or in case

of multiple authorisations or registrations, the Member State or

EEA State in which the AIF has been authorised or registered

for the first time; or

(b) if the AIF is neither authorised nor registered in a

Member State or EEA State, the Member State or EEA State in

which the AIF has its registered office and, or head office;

"Maltese AIF" means

(a)

an AIF which is authorised or registered in Malta, in

accordance with Maltese law; or

(b) an AIF which is not authorised or registered in

Malta but has its registered office and, or head office in Malta;

"Maltese AIFM" means an AIFM which is licenced in terms of

the Act and which has its registered office in Malta;

"Maltese AIFM host Member State or EEA State" means

(a)

a Member State or EEA State, other than Malta, in

which a Maltese AIFM manages European AIFs; or

(b) a Member State or EEA State, other than Malta, in

which a Maltese AIFM markets units or shares of a European

AIF;

"managing AIFs" means performing at least investment

management functions referred to in point 1(a) or (b) of Annex I of

the Directive for one or more AIFs;

"marketing" means a direct or indirect offering or placement at

the initiative of the AIFM or on behalf of the AIFM of units or shares

of an AIF that it manages to or with investors domiciled or with a

registered office in a Member State or EEA State;

"Tribunal" means the Financial Services Tribunal established in

terms of the Malta Financial Services Authority Act;

"the UCITS Directive" means Council Directive 85/611/EEC of

20 December 1985 on the co-ordination of laws, regulations and

administrative provisions relating to undertakings for collective

investment in transferable securities (UCITS), as amended from time

to time, and includes any implementing measures that may be issued

thereunder.

(2) Words and expressions used in these regulations which are

also used in the Act but which are not defined herein shall have the

same meaning as in the Act.

(3) In the event that any of these regulations conflict with the

provisions of the AIFM Directive, the latter shall prevail.

FREEDOM TO PROVIDE SERVICES AND FREEDOM OF

ESTABLISHMENT BY MALTESE AIFMs

(1) A Maltese AIFM may manage a European AIF

directly provided the Maltese AIFM is authorised to manage that type

of AIF.

(2) A Maltese AIFM intending to manage a European AIF for

the first time shall communicate the following information to the

competent authority

(a)

the Member State or EEA State in which it intends

to manage AIFs directly;

(b) a programme of operations stating the particular

services which the Maltese AIFM intends to perform and

identifying the AIFs it intends to manage.

(3) The competent authority shall within one month of

receiving the complete documentation submitted in accordance with

sub-regulation (2) transmit the complete documentation to the

European regulatory authority of the Maltese AIFM host Member

State or EEA State. The competent authority shall also enclose a

statement to the effect that the Maltese AIFM is licensed in terms of

the Act

Provided that such transmission shall occur only if the

Maltese AIFM’s management of the European AIF complies and will

continue to comply with the provisions of the AIFM Directive and if

the Maltese AIFM otherwise complies with the provisions of the

AIFM Directive.

(4) The competent authority shall immediately notify the

Maltese AIFM about the transmission of the notification pursuant to

sub-regulation (3).

(5) Upon receipt of the transmitted notification referred to in

sub-regulation (4), the Maltese AIFM may start to provide its services

in the host Member State or EEA State.

(6) In the event of a change to any of the information

communicated in accordance with sub-regulation (2), the Maltese

AIFM shall give written notice of such change to the competent

authority at least one month before implementing planned changes, or

immediately after an unplanned change has occurred.

(7) Where, pursuant to a planned change, the Maltese AIFM’s

management of the European AIF would no longer comply with the

provisions of the AIFM Directive or the Maltese AIFM would

otherwise no longer comply with the provisions of the AIFM

Directive, the competent authority shall inform the Maltese AIFM

without undue delay that it is not to implement the change.

(8) Where the Maltese AIFM proceeds with the

implementation of the planned change, notwithstanding the

notification made pursuant to sub-regulations (6) and (7), or if an

unplanned change has taken place pursuant to which the Maltese

AIFM’s management of the European AIF no longer complies with

the provisions of the AIFM Directive or the Maltese AIFM otherwise

no longer complies with the provisions of the AIFM Directive, the

competent authority shall take all due measures in accordance with

the provisions of the Act and any regulations issued thereunder.

(9) If the planned changes are acceptable because they do not

affect the compliance by the Maltese AIFM’s management of the

European AIF with the provisions of the AIFM Directive, or the

compliance by the Maltese AIFM with the provisions of the AIFM

Directive, the competent authority shall, without undue delay, inform

the European regulatory authority of the Maltese AIFM host Member

State or EEA State of those changes.

(1) A Maltese AIFM may manage a European AIF

through the establishment of a branch in another Member State or

EEA State, provided the Maltese AIFM is authorised to manage that

type of AIF.

(2) A Maltese AIFM intending to manage a European AIF in

another Member State or EEA State for the first time and establish a

branch shall communicate the following information to the competent

authority

(a)

the Member State or EEA State in which it intends

to establish a branch;

(b) a programme of operations stating the particular

services which the Maltese AIFM intends to perform and

identifying the AIFs it intends to manage;

(c)

the organisational structure of the branch;

(d) the address in the home Member State or EEA State

of the AIF from which documents may be obtained;

(e)

the names and contact details of the persons

responsible for the management of the branch.

(3) The competent authority shall within two months of

receiving the complete documentation submitted in accordance with

sub-regulation (2), transmit the said complete documentation to the

European regulatory authority of the host Member State or EEA State

where the Maltese AIFM intends establishing a branch. The

competent authority shall also enclose a statement to the effect that

the Maltese AIFM is licensed in terms of the Act

Provided that such transmission shall occur only if the

Maltese AIFM’s management of the European AIF complies and will

continue to comply with the provisions of the AIFM Directive and the

Maltese AIFM itself otherwise complies with the provisions of the

AIFM Directive.

(4) The competent authority shall immediately notify the

Maltese AIFM about the transmission pursuant to sub-regulation (3).

(5) Upon receipt of the transmission notification referred to in

sub-regulation (4), the Maltese AIFM may start to provide its services

in the host Member State or EEA State.

(6) In the event of a change to any of the information

communicated in accordance with sub-regulation (2), the Maltese

AIFM shall give written notice of such change to the competent

authority at least one month before implementing planned changes, or

immediately after an unplanned change has occurred.

(7) Where, pursuant to a planned change, the Maltese AIFM’s

management of the European AIF would no longer comply with the

provisions of the AIFM Directive or the Maltese AIFM itself would

otherwise no longer comply with the provisions of the AIFM

Directive, the competent authority shall inform the Maltese AIFM

without undue delay that it shall not implement the change.

(8) Where the Maltese AIFM proceeds with the

implementation of the planned change, notwithstanding the

notification received pursuant to sub-regulations (6) and (7), or if an

unplanned change has taken place pursuant to the which the Maltese

AIFM’s management of the European AIF no longer complies with

the provisions of the AIFM Directive or the Maltese AIFM otherwise

no longer complies with the provisions of the AIFM Directive, the

competent authority shall take all due measures in accordance with

the provisions of the Act and any regulations issued thereunder.

(9) If the planned changes are acceptable because they do not

affect the compliance of the Maltese AIFM’s management of the

European AIF with the provisions of the AIFM Directive, or the

compliance by the Maltese AIFM of the provisions of the AIFM

Directive, the competent authority shall, without undue delay, inform

the European regulatory authority of the AIFM host Member State or

EEA State of those changes.

(1) The competent authority shall be responsible for the Breaches by

prudential supervision of a Maltese AIFM, whether the Maltese Maltese AIFMs.

AIFM manages and, or markets AIFs in another Member State or

EEA State or not, without prejudice to the provisions of the AIFM

Directive conferring responsibility for supervision on the European

regulatory authority of the host Member State or EEA State of the

Maltese AIFM.

(2) The supervision of the Maltese AIFM’s compliance with

Articles 12 and 14 of the AIFM Directive shall be the responsibility

of the European regulatory authority of the host Member State or

EEA State where the Maltese AIFM manages and, or markets AIFs

through a branch in that Member State or EEA State.

(3) A Maltese AIFM managing or marketing AIFs in a

Member State or EEA State other than Malta whether or not through a

branch, may be required by the European regulatory authority of the

host Member State or EEA State to provide information necessary for

the supervision of its compliance with the applicable regulatory

requirements for which that European regulatory authority is

responsible.

(4) Where a Maltese AIFM is managing and, or marketing

AIFs in a Member State or EEA State other than Malta, whether or

not through a branch, and is in breach of one of the regulatory

requirements for which the European regulatory authority is

responsible for ensuring compliance, the competent authority shall

receive notification from the European regulatory authority of the

host Member State or EEA State of its request made to the Maltese

AIFM to put an end to that breach.

(5) If the Maltese AIFM refuses to provide the European

regulatory authority with information falling under its responsibility,

or fails to take the necessary steps to put an end to breach referred to

in sub-regulation (4), the European regulatory authority shall inform

the competent authority thereof.

(6) Where the competent authority receives a notification from

a European regulatory authority pursuant to sub-regulation (5), the

competent authority shall, at the earliest opportunity

(a)

take all appropriate measures to ensure that the

Maltese AIFM concerned provides the information requested by

the European regulatory authority of the host Member State or

EEA State, pursuant to sub-regulation (3) or puts an end to the

breach referred to in sub-regulation (4);

(b) request the necessary information from the relevant

supervisory authorities in third countries

Provided that the competent authority shall communicate

to the European regulatory authority of the host Member State or

EEA State the nature of the measures taken pursuant to this sub-

regulation.

(7) Where a Maltese AIFM continues to refuse to provide the

information requested by the European regulatory authority in the

host Member State or EEA State pursuant to sub-regulation (3) or

persists in breaching the legal or regulatory provisions referred to in

sub-regulation (4) in force in the host Member State or EEA State,

despite the measures taken by the competent authority pursuant to

sub-regulations (5) and (6), or due to the inadequacy or unavailability

of such measures in Malta, the competent authority shall be notified

of any measures that are proposed to be taken by the European

regulatory authority of the host Member State or EEA State against

the Maltese AIFM to prevent or penalise further irregularities by the

Maltese AIFM.

(8) Where the European regulatory authority of the host

Member State or EEA State of the Maltese AIFM has clear and

demonstrable grounds for believing that such Maltese AIFM is in

breach of regulatory provisions in relation to which such European

regulatory authority has no responsibility for supervising compliance,

the competent authority shall receive notification of such breach from

the European regulatory authority in the host Member State or EEA

State. The competent authority shall take appropriate measures

including if necessary, request additional information from the

relevant supervisory authorities in third countries.

(9) Where despite the measures taken by the competent

authority, or due to the inadequacy of such measures or because the

competent authority fails to act within a reasonable time, a Maltese

AIFM persists in acting in a manner that is clearly prejudicial to the

interests of the investors of the relevant AIF, the financial stability or

the integrity of the market in the host Member State or EEA State, the

competent authority shall receive notification by the European

regulatory authority of the host Member State or EEA State of any

measures proposed to be taken in order to protect the investors of the

relevant AIF, the financial stability and integrity of the market in the

European Member State or EEA State including the possibility of

preventing the Maltese AIFM concerned to further market the units or

shares of the relevant AIF in the host Member State or EEA State.

FREEDOM TO PROVIDE SERVICES AND FREEDOM OF

ESTABLISHMENT BY EUROPEAN AIFMs

(1) A European AIFM may manage a Maltese AIF Freedom of

directly in Malta provided the European AIFM is authorised to establishment

European

manage that type of AIF. The European AIFM shall be exempt from AIFMs

management of

the provisions of article 3 of the Act.

a European AIF.

(2) A European AIFM intending to manage Maltese AIFs in

Malta for the first time shall communicate the following information

to the European regulatory authority in its home Member State or

EEA State

(a)

the intention to manage AIFs directly in Malta;

(b) a programme of operations stating the particular

services which the European AIFM intends to perform and

identifying the AIFs it intends to manage.

(3) The competent authority shall, within one month from

submission by the European AIFM to the European regulatory

authority of the complete documentation in accordance with

subregulation (2), receive the complete documentation from the

European regulatory authority of the European AIFM’s home

Member State or EEA State. The competent authority shall receive a

statement to the effect that the European AIFM is authorised by the

European regulatory authority in terms of the AIFM Directive

Provided that such transmission shall occur only if the

European AIFM’s management of the Maltese AIF complies and will

continue to comply with the provisions of the AIFM Directive and the

European AIFM otherwise complies with the provisions of the AIFM

Directive.

(4) Upon notification by the European regulatory authority of

the home Member State or EEA Member State to the European AIFM

that the transmission referred to in sub-regulation (3) has occurred,

the European AIFM may start to provide its services in Malta.

(5) The competent authority shall not impose any additional

requirements on the European AIFM concerned in respect of matters

which are covered by the AIFM Directive.

(6) In the event of a change to any of the information

communicated in accordance with sub-regulation (2), which changes

do not affect the compliance by the European AIFM’s management of

the Maltese AIF with the provisions of the AIFM Directive or the

compliance by the European AIFM of the provisions of the AIFM

Directive, the competent authority shall receive notification of such

changes from the European regulatory authority of the home Member

State or EEA State of the European AIFM.

(1) A European AIFM may manage a Maltese AIF in

Malta through the establishment of a branch provided the European

AIFM is authorised to manage that type of AIF. The European AIFM

shall be exempt from the provisions of article 3 of the Act.

(2) A European AIFM intending to manage a Maltese AIF in

Malta for the first time through the establishment of a branch shall

communicate the following information to the European regulatory

authority in its home Member State or EEA State

(a)

the intention to manage AIFs directly in Malta;

(b) a programme of operations stating the particular

services which the European AIFM intends to perform and

identifying the AIFs it intends to manage;

(c)

the organisational structure of the branch;

(d) the address in the home Member State or EEA State

of the AIF from which documents may be obtained;

(e)

the names and contact details of the persons

responsible for the management of the branch.

(3) The competent authority shall within two months from

submission by the European AIFM of the complete documentation in

accordance with sub-regulation (2), receive the complete

documentation from the European regulatory authority of the

European AIFM’s home Member State or EEA State. The competent

authority shall receive a statement to the effect that the European

AIFM is authorised by the European regulatory authority in terms of

the AIFM Directive

Provided that such transmission shall occur only if the

European AIFM’s management of the Maltese AIF complies and will

continue to comply with the provisions of the AIFM Directive and the

European AIFM otherwise complies with the provisions of the AIFM

Directive.

(4) Upon notification by the European regulatory authority of

the home Member State or EEA Member State to the European AIFM

that the transmission referred to in sub-regulation (3) has occurred,

the European AIFM may start to provide its services in Malta.

(5) The competent authority shall not impose any additional

requirements on the European AIFM concerned in respect of matters

which are covered by the AIFM Directive.

(6) In the event of a change to any of the information

communicated in accordance with sub-regulation (2), which changes

do not affect the compliance by the European AIFM’s management of

the Maltese AIF with the provisions of the AIFM Directive or the

compliance by the European AIFM of the provisions of the AIFM

Directive, the competent authority shall receive notification of such

changes from the European regulatory authority of the home Member

State or EEA State of the European AIFM.

(1) The competent authority may require a European Breaches by

European

AIFM managing or marketing AIFs in Malta, whether or not through AIFMs.

a branch, to provide the information necessary for the supervision of

the European AIFM’s compliance with the applicable regulatory

provisions for which the competent authority is responsible

Provided that the requirements imposed shall not be more

stringent than those which the competent authority imposes on

Maltese AIFMs for monitoring compliance with the same provisions.

(2) Where the competent authority ascertains that a European

AIFM managing and, or marketing Maltese, and, or European AIFs in

Malta, whether or not through a branch, is in breach of one of the

provisions in relation to which the competent authority is responsible

for supervising compliance, the competent authority shall require the

European AIFM concerned to put an end to that breach and shall

proceed to notify the European regulatory authority of the home

Member State or EEA State thereof.

(3) If the European AIFM concerned refuses to provide the

competent authority with information for which such authority is

responsible, or fails to take the necessary steps to put an end to the

breach identified in sub-regulation (2), the competent authority shall

inform the European regulatory authority of its home Member State

or EEA State thereof

Provided that the competent authority shall be notified by

the European regulatory authority of the nature of any measures

taken.

(4) Where a European AIFM continues in its refusal to provide

information requested by the competent authority in terms of sub-

regulation (1), or persists in breaching the legal or regulatory

provisions referred to in sub-regulation (2) in force in Malta, despite

the measures taken by the European regulatory authority of the home

Member State or EEA State or due to the inadequacy or unavailability

of such measures in the said Member State or EEA State, the

competent authority may, after informing the European regulatory

authority of the home Member State or EEA State of the European

AIFM, take appropriate measures, including those laid down in

Articles 46 and 48 of the AIFM Directive, to prevent or penalise

further irregularities and, in so far as necessary, to prevent the

European AIFM from initiating any further transactions in Malta.

Where the function carried out in Malta by the European AIFM is the

management of AIFs, the competent authority may require that the

European AIFM cease managing those AIFs.

(5) Where the competent authority has clear and demonstrable

grounds for believing that a European AIFM is in breach of the

obligations arising from provisions in relation to which the competent

authority has no responsibility for supervising compliance, the

competent authority shall refer those finding to the European

regulatory authority of the home Member State or EEA State of the

European AIFM, which shall take appropriate measures, including if

necessary, request additional information from the relevant

supervisory authorities in third countries.

(6) Where a European AIFM persists in acting in a manner

that is clearly prejudicial to the interests of the investors of the

relevant AIF, the financial stability or the integrity of the Maltese

market, despite the measures taken by the European regulatory

authority in the home Member State or EEA State of the European

AIFM, or due to the inadequacy of such measures in the European

Member State or EEA State or because the European regulatory

authority fails to act within a reasonable time, the competent

authority may, after informing the European regulatory authority in

the home Member State or EEA State, take all appropriate measures

needed in order to protect the investors of the relevant AIF, the

financial stability and integrity of the Maltese market, including the

possibility of preventing the European AIFM concerned to further

market the units or shares of the relevant AIF in Malta.

(7) The supervision of a European AIFM’s compliance with

Articles 12 and 14 of the AIFM Directive shall be the responsibility

of the competent authority where the European AIFM manages and,

or markets AIFs through a branch established in Malta.

€0.63